Section 338 duties are now assessed at 50% on specific goods of Canadian origin, effective Saturday, August 22. The tariffs are expected to impact approximately $20 billion worth of Canadian imports. The action was originally announced in proclamations issued July 20, which found that certain Canadian policies discriminated against US commerce in three sectors: alcohol, dairy, and motor vehicles. The implementation date was delayed to allow additional time for trade negotiations. However, those discussions were ultimately unsuccessful, and the tariffs were implemented last weekend.
It is important to note a few details about this tariff action:
- Each of the original proclamations includes an Annex outlining the impacted HTS codes. These Annexes should be referenced carefully to understand applicability.
- There are some product category exemptions carved out, including energy, potash, fish, and critical minerals.
- Goods that are subject to Section 232 tariffs are also exempt from these Section 338 tariffs.
- USMCA qualification does not exempt a product from paying Section 338 tariffs. This is different from other previously implemented tariffs, and it is extremely important to note. If a product qualifies for USMCA and has a base duty rate of 0%, the 50% Section 338 tariff may still apply if the product's HTS code is listed in one of the Proclamation Annexes.
Review all important resources at the following links:
- White House Fact Sheet
- Alcohol Proclamation
- Dairy Proclamation
- Motor Vehicles Proclamation
- Tariff Start Date Delay
- Federal Register Notice
- CBP Issued CSMS Message for Operational Guidance
- CBP Provided Consolidated List of Impacted HTS Codes
The Laufer Group team will continue to monitor these changes and provide updates on any significant developments.
Please contact your local customer service, customs brokerage or sales representative for additional information and service options and continue to visit laufer.com for more market Insights.